First retail pot shops open in California

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After a year of planning, California makes history on Monday when it opens its first retail marijuana stores, allowing adults to buy up to an ounce of the drug.

Nearly 50 dispensaries in the Bay Area and Santa Cruz are allowed to sell recreational cannabis, and more licenses are pending.

In addition, about 20 licenses for cannabis cultivation and 22 licenses for manufacturing, which involves extracting desired chemicals, have been issued in the region.

“We’re really excited, and ready to go,” said Marcus Genosky of the San Jose-based dispensary Elemental Wellness. “We’re amped that the process, and all the operational systems, are all in place.”

Defying federal law, Californians have been lawfully using cannabis since passage of Prop. 64 in November 2016. But sales only become legal on Monday. California is one of eight states and the District of Columbia that have adopted permissive laws legalizing marijuana for recreational use.

To prepare, the state quickly erected a system to regulate and monitor the new businesses that grow, manufacture, distribute and sell cannabis. Final “emergency” regulations and the application process didn’t open until late last month.

State regulators with the Bureau of Cannabis Control worked all weekend to review and approve licenses. Some shops didn’t learn their fate until Saturday or Sunday.

“We’ve been sweating it, not knowing if we’d be able to open on Jan. 1,” said Debby Goldsberry, executive director of Oakland-based dispensary Magnolia Wellness.

After their permits arrived on Saturday, “we are making all the changes to our procedures to meet state regulations,” she said. “One hundred things have to be done differently when we wake up tomorrow — from packaging and labeling to purchasing and the way the product travels through the building.”

But because time was short, all of the current licenses are temporary, set to expire on May 1. Businesses will then need to re-apply for permanent licenses.

Retail licenses were awarded to 16 shops in San Jose, 20 in Oakland, six in Santa Cruz, two in Berkeley, two in Richmond and one in Hayward.

All of the shops are operating as cash-only because banks don’t want to violate federal law.

Of the state’s 150 cultivation licenses so far, 11 are in Santa Clara County, five are in Santa Cruz County and three are in Alameda County.

There is a “grace period” for retail businesses to comply with the law. For example, inventory bought from vendors as a “medical” product before Jan. 1 can be sold on their shelves as a “recreational” product. Testing and labels are not yet fully compliant.

But by July, businesses must follow the letter of the law.

The new rules require that pot businesses get permits from local authorities before being granted a state license.

So stores in cities like San Jose, Oakland, Berkeley and Santa Cruz — which were quick to approve regulations — were at the top of the list for state approval. Most shops are small and inconspicuous storefronts on the industrial edges of town. Former medical marijuana dispensaries, they’ll simply transfer their product to recreational sales.

But stores in cities like San Francisco and Los Angeles, late to approve local regulations, will not be selling recreational weed on Monday.

On Sunday evening, some cannabis growers, distributors and manufacturers still hadn’t received their licenses, so they were offering product at deep discounts.

“They’re suspending sales, or going out of business,” said Goldsberry. “We’re stocking up, with blowout sales.”